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XRAY Stock Declines as Q3 Earnings & Sales Miss Estimates, Outlook Cut
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Key Takeaways
XRAY's Q3 revenues declined 7.6% to $836 million, reflecting weakness across three dental segments.
Wellspect Healthcare sales increased 10.1% to $92 million, supported by new product launches.
XRAY lowered its 2026 adjusted EPS guidance to $1.20-$1.30 from $1.40-$1.50.
DENTSPLY SIRONA Inc. (XRAY - Free Report) reported third-quarter 2026 adjusted earnings per share (EPS) of 29 cents, down 29.4% year over year on an actual-value basis. The figure missed the Zacks Consensus Estimate of 30 cents by 3.3%
GAAP loss per share was 1 cent against a loss of $2.14 in the prior-year quarter.
XRAY's Revenue Details
Revenues declined 7.6% reportedly to $836 million and 7% at constant currency (cc). The figure missed the Zacks Consensus Estimate by 2.3%. Weakness across three dental segments weighed on sales, partly offset by record Wellspect Healthcare revenues.
XRAY's quarterly performance reflected lower dental volumes, planned distributor inventory reductions and the absence of Byte revenues. Excluding Byte, approximately $10 million of planned dealer inventory reductions and other discrete items, revenues declined 3.8% at cc.
Shares of XRAY lost 14.6% in yesterday's after-market trading following weak quarterly updates. The weakness coincided with a broader Wall Street sell-off following the Democrats’ sweeping victory in the U.S. midterm elections, which dealt a significant political setback to President Donald Trump.
Concerns over AI valuations, technology spending and potential regulatory restrictions fueled the market-wide sell-off, adding to negative investor sentiment surrounding XRAY's weaker earnings outlook. The stock has declined 11.7% year to date against the industry's 19.6% growth. The S&P 500 Index has risen 11.5% over the said time frame.
Image Source: Zacks Investment Research
Dentsply Sirona's Segment Performance
DENTSPLY SIRONA generates revenues under four segments: Connected Technology Solutions, Essential Dental Solutions, Orthodontic and Implant Solutions, and Wellspect Healthcare.
Connected Technology Solutions revenues totaled $230 million, down 11% reportedly and 10.1% at cc. Lower CAD/CAM volumes in the Americas, driven by planned distributor inventory reductions, and weaker global imaging demand weighed on performance.
Essential Dental Solutions generated $343 million in revenues, declining 4% reportedly and 3.6% at cc. Lower endodontic volumes and unfavorable pricing in EMEA were partly offset by higher U.S. endodontic file and restorative block sales.
Orthodontic and Implant Solutions revenues declined 16.6% to $171 million, reflecting a $12 million Byte headwind and lower premium implant volumes. Double-digit U.S. MIS implant growth offered partial support. Sales were down 16.2% at cc.
Wellspect Healthcare remained the bright spot, with revenues increasing 10.1% to $92 million. Growth benefited from higher volumes and new Surity product launches. Sales were up 11% at cc.
XRAY's Geographic Revenue Performance
Americas revenues fell 9.4% reportedly and 9.6% at cc. Planned distributor inventory adjustments and weakness across dental product categories continued to pressure regional performance.
EMEA revenues declined 6.7% reportedly and 5.6% at cc, reflecting distributor destocking, pricing pressure and geopolitical uncertainty. APAC revenues dropped 5.2% reportedly and 4.3% at cc.
Dentsply Sirona's Margin and Expense Picture
Adjusted gross profit totaled $456 million compared with $475 million a year earlier. Adjusted gross margin, however, expanded 190 basis points (bps) to 54.5%.
The quarter included a $39 million pretax benefit from a revised inventory profit estimate, which management does not expect to recur.
Selling, general and administrative expenses increased 2.3% to $363 million, while research and development expenses rose 13.5% to $42 million.
Adjusted operating income declined to $95 million from $119 million. Adjusted operating margin contracted 170 bps to 11.5%. Adjusted EBITDA fell 13.3% to $146 million, with the corresponding margin contracting 110 bps to 17.3%.
XRAY's Cash Flow and Liquidity
XRAY ended the third quarter of 2026 with $195 million in cash and cash equivalents, down from $239 million as of June-end.
Cumulative net cash provided by operating activities was $171 million compared with $134 million in the prior-year period. However, operating cash flow during the quarter declined to $32 million from $79 million, primarily due to unfavorable working capital. Free cash flow declined to nil from $40 million a year earlier.
The company repurchased 1.2 million shares for approximately $13 million during the quarter, bringing year-to-date repurchases to $25 million.
Dentsply Sirona's 2026 Outlook and Strategic Progress
DENTSPLY SIRONA lowered its 2026 net sales outlook to approximately $3.5 billion from $3.5-$3.6 billion. Adjusted EPS guidance was also narrowed to $1.20-$1.30 from $1.40-$1.50, excluding the 17-cent one-time tariff refund benefit.
Management attributed roughly three-quarters of the EPS guidance reduction to EMEA underperformance and the Middle East conflict, with unfavorable taxes and strategic investments accounting for the balance.
The company continued executing its Return-to-Growth Action Plan, signing seven North American distribution agreements year to date. U.S. sales force vacancies declined to mid-single-digit levels from more than 20% previously.
Clinical education investments in North America increased sixfold year over year during the second half of 2026. The company is also pursuing approximately $120 million in transformation-related savings this year, while prioritizing commercial execution and operational simplification.
DENTSPLY SIRONA Inc. Price, Consensus and EPS Surprise
DENTSPLY SIRONA's third-quarter 2026 results reflect persistent challenges across its core dental businesses, despite encouraging progress in select product categories. Declining revenues, lower adjusted earnings and weaker cash generation underscore the pressure from soft dental demand, distributor inventory reductions and continued investments in its turnaround initiatives. The downward revision to full-year guidance further indicates that a broad-based recovery remains elusive.
The persistent weakness in premium implants, capital equipment and EMEA markets remains concerning. Geopolitical uncertainty, pricing pressure and distributor destocking could continue to constrain revenue recovery. Moreover, the sizable one-time inventory accounting benefit supported quarterly profitability, raising questions about the underlying earnings trajectory. Management's decision to retain this benefit in its reduced annual guidance highlights the extent of ongoing operating pressures.
On the positive side, Wellspect Healthcare's record sales, double-digit U.S. MIS implant growth and improving endodontic performance demonstrate that targeted commercial investments are beginning to yield results. The expansion of the North American distribution network, stabilization of the U.S. sales force and increased clinical education spending should strengthen customer engagement and support product adoption over time. Wellspect's expanding Surity portfolio and Medicare coverage also provide opportunities for sustained growth.
Zacks Rank and Stocks to Consider
DENTSPLY SIRONA currently has a Zacks Rank #4 (Sell).
Glaukos, currently sporting a Zacks Rank #1, reported third-quarter 2026 earnings per share of 47 cents, which beat the Zacks Consensus Estimate by 491.67%. Revenues of $211 million surpassed the Zacks Consensus Estimate by 24.99%.
Glaukos has an estimated earnings growth rate of 268.8% for 2027. GKOS’ earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 138.6%.
Becton, Dickinson and Company, currently carrying a Zacks Rank #2 (Buy), reported second-quarter 2026 adjusted EPS of $3.23, which beat the Zacks Consensus Estimate by 2.87%. Revenues of $4.98 billion surpassed the Zacks Consensus Estimate by 1.81%.
Becton, Dickinson and Company has an estimated long-term earnings growth rate of 1.1%. BDX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 2.94%.
Globus Medical, carrying a Zacks Rank of 2 at present, reported a second-quarter fiscal 2026 adjusted EPS of $1.34, which beat the Zacks Consensus Estimate by 19.6%. Revenues of $790 million missed the Zacks Consensus Estimate by 0.35%.
Globus Medical has an estimated long-term earnings growth rate of 12.4%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 27.88%.
View the Zacks #1 Rank List
Image: Bigstock
XRAY Stock Declines as Q3 Earnings & Sales Miss Estimates, Outlook Cut
Key Takeaways
DENTSPLY SIRONA Inc. (XRAY - Free Report) reported third-quarter 2026 adjusted earnings per share (EPS) of 29 cents, down 29.4% year over year on an actual-value basis. The figure missed the Zacks Consensus Estimate of 30 cents by 3.3%
GAAP loss per share was 1 cent against a loss of $2.14 in the prior-year quarter.
XRAY's Revenue Details
Revenues declined 7.6% reportedly to $836 million and 7% at constant currency (cc). The figure missed the Zacks Consensus Estimate by 2.3%. Weakness across three dental segments weighed on sales, partly offset by record Wellspect Healthcare revenues.
XRAY's quarterly performance reflected lower dental volumes, planned distributor inventory reductions and the absence of Byte revenues. Excluding Byte, approximately $10 million of planned dealer inventory reductions and other discrete items, revenues declined 3.8% at cc.
Shares of XRAY lost 14.6% in yesterday's after-market trading following weak quarterly updates. The weakness coincided with a broader Wall Street sell-off following the Democrats’ sweeping victory in the U.S. midterm elections, which dealt a significant political setback to President Donald Trump.
Concerns over AI valuations, technology spending and potential regulatory restrictions fueled the market-wide sell-off, adding to negative investor sentiment surrounding XRAY's weaker earnings outlook. The stock has declined 11.7% year to date against the industry's 19.6% growth. The S&P 500 Index has risen 11.5% over the said time frame.
Image Source: Zacks Investment Research
Dentsply Sirona's Segment Performance
DENTSPLY SIRONA generates revenues under four segments: Connected Technology Solutions, Essential Dental Solutions, Orthodontic and Implant Solutions, and Wellspect Healthcare.
Connected Technology Solutions revenues totaled $230 million, down 11% reportedly and 10.1% at cc. Lower CAD/CAM volumes in the Americas, driven by planned distributor inventory reductions, and weaker global imaging demand weighed on performance.
Essential Dental Solutions generated $343 million in revenues, declining 4% reportedly and 3.6% at cc. Lower endodontic volumes and unfavorable pricing in EMEA were partly offset by higher U.S. endodontic file and restorative block sales.
Orthodontic and Implant Solutions revenues declined 16.6% to $171 million, reflecting a $12 million Byte headwind and lower premium implant volumes. Double-digit U.S. MIS implant growth offered partial support. Sales were down 16.2% at cc.
Wellspect Healthcare remained the bright spot, with revenues increasing 10.1% to $92 million. Growth benefited from higher volumes and new Surity product launches. Sales were up 11% at cc.
XRAY's Geographic Revenue Performance
Americas revenues fell 9.4% reportedly and 9.6% at cc. Planned distributor inventory adjustments and weakness across dental product categories continued to pressure regional performance.
EMEA revenues declined 6.7% reportedly and 5.6% at cc, reflecting distributor destocking, pricing pressure and geopolitical uncertainty. APAC revenues dropped 5.2% reportedly and 4.3% at cc.
Dentsply Sirona's Margin and Expense Picture
Adjusted gross profit totaled $456 million compared with $475 million a year earlier. Adjusted gross margin, however, expanded 190 basis points (bps) to 54.5%.
The quarter included a $39 million pretax benefit from a revised inventory profit estimate, which management does not expect to recur.
Selling, general and administrative expenses increased 2.3% to $363 million, while research and development expenses rose 13.5% to $42 million.
Adjusted operating income declined to $95 million from $119 million. Adjusted operating margin contracted 170 bps to 11.5%. Adjusted EBITDA fell 13.3% to $146 million, with the corresponding margin contracting 110 bps to 17.3%.
XRAY's Cash Flow and Liquidity
XRAY ended the third quarter of 2026 with $195 million in cash and cash equivalents, down from $239 million as of June-end.
Cumulative net cash provided by operating activities was $171 million compared with $134 million in the prior-year period. However, operating cash flow during the quarter declined to $32 million from $79 million, primarily due to unfavorable working capital. Free cash flow declined to nil from $40 million a year earlier.
The company repurchased 1.2 million shares for approximately $13 million during the quarter, bringing year-to-date repurchases to $25 million.
Dentsply Sirona's 2026 Outlook and Strategic Progress
DENTSPLY SIRONA lowered its 2026 net sales outlook to approximately $3.5 billion from $3.5-$3.6 billion. Adjusted EPS guidance was also narrowed to $1.20-$1.30 from $1.40-$1.50, excluding the 17-cent one-time tariff refund benefit.
Management attributed roughly three-quarters of the EPS guidance reduction to EMEA underperformance and the Middle East conflict, with unfavorable taxes and strategic investments accounting for the balance.
The company continued executing its Return-to-Growth Action Plan, signing seven North American distribution agreements year to date. U.S. sales force vacancies declined to mid-single-digit levels from more than 20% previously.
Clinical education investments in North America increased sixfold year over year during the second half of 2026. The company is also pursuing approximately $120 million in transformation-related savings this year, while prioritizing commercial execution and operational simplification.
DENTSPLY SIRONA Inc. Price, Consensus and EPS Surprise
DENTSPLY SIRONA Inc. price-consensus-eps-surprise-chart | DENTSPLY SIRONA Inc. Quote
Our Take
DENTSPLY SIRONA's third-quarter 2026 results reflect persistent challenges across its core dental businesses, despite encouraging progress in select product categories. Declining revenues, lower adjusted earnings and weaker cash generation underscore the pressure from soft dental demand, distributor inventory reductions and continued investments in its turnaround initiatives. The downward revision to full-year guidance further indicates that a broad-based recovery remains elusive.
The persistent weakness in premium implants, capital equipment and EMEA markets remains concerning. Geopolitical uncertainty, pricing pressure and distributor destocking could continue to constrain revenue recovery. Moreover, the sizable one-time inventory accounting benefit supported quarterly profitability, raising questions about the underlying earnings trajectory. Management's decision to retain this benefit in its reduced annual guidance highlights the extent of ongoing operating pressures.
On the positive side, Wellspect Healthcare's record sales, double-digit U.S. MIS implant growth and improving endodontic performance demonstrate that targeted commercial investments are beginning to yield results. The expansion of the North American distribution network, stabilization of the U.S. sales force and increased clinical education spending should strengthen customer engagement and support product adoption over time. Wellspect's expanding Surity portfolio and Medicare coverage also provide opportunities for sustained growth.
Zacks Rank and Stocks to Consider
DENTSPLY SIRONA currently has a Zacks Rank #4 (Sell).
Some stocks worth considering from the broader medical space are Glaukos (GKOS - Free Report) , Becton, Dickinson and Company (BDX - Free Report) and Globus Medical (GMED - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Glaukos, currently sporting a Zacks Rank #1, reported third-quarter 2026 earnings per share of 47 cents, which beat the Zacks Consensus Estimate by 491.67%. Revenues of $211 million surpassed the Zacks Consensus Estimate by 24.99%.
Glaukos has an estimated earnings growth rate of 268.8% for 2027. GKOS’ earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 138.6%.
Becton, Dickinson and Company, currently carrying a Zacks Rank #2 (Buy), reported second-quarter 2026 adjusted EPS of $3.23, which beat the Zacks Consensus Estimate by 2.87%. Revenues of $4.98 billion surpassed the Zacks Consensus Estimate by 1.81%.
Becton, Dickinson and Company has an estimated long-term earnings growth rate of 1.1%. BDX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 2.94%.
Globus Medical, carrying a Zacks Rank of 2 at present, reported a second-quarter fiscal 2026 adjusted EPS of $1.34, which beat the Zacks Consensus Estimate by 19.6%. Revenues of $790 million missed the Zacks Consensus Estimate by 0.35%.
Globus Medical has an estimated long-term earnings growth rate of 12.4%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 27.88%.